Image source: BT Group plc
The dividend is open BT Group (LSE:BT.A) shares have been on a slow rise since the pandemic. And in good news for income investors, the group announced a 2% increase in interim payments for this year.
But with more FTSE 100 dividend stocks are available, sometimes it can be difficult to know which ones to choose. So should BT shares be considered? Let’s take a closer look.
Good for income
Based on the 8.16p paid for the year ending 31 March 2025 (FY25), BT shares currently (19 January) make 4.5%. Like many businesses, it has suspended its payments during the crisis. But since then, it has been steadily rising. In currency terms, its FY25 dividends were 6% higher than FY22.
On a positive note, it announced a 2% increase in its interim payment for FY26. Shareholders will therefore receive a dividend of 2.45pa on 11 February. But what will be its ultimate benefit? According to analysts, the total payout for the year is expected to be 7.67p, which means a reduction in the final dividend of 9.3%.
| Fiscal year (March 31) | Share the price (pence) | Dividends per share (pence) | Express (%) |
|---|---|---|---|
| 2022 | 182.20 | 7.70 | 4.2 |
| 2023 | 145.80 | 7.70 | 5.3 |
| 2024 | 109.65 | 8.00 | 7.3 |
| 2025 | 165.85 | 8.16 | 4.9 |
| On 19.1.26 | 181.36 | 7.67 (forecast) | 4.2 |
If correct, this may not be well received by the market, and its share price may drop significantly. But based on today’s price of 181.36p, it would still mean a higher yield than the FTSE 100. And it means that someone buying 5,000 shares – at a cost of £9,068 (excluding any fees and stamp duty) – would receive £383.50 in dividends over the next 12 months.
To see in the future
Looking ahead, analysts expect dividends of 7.96p (FY27), and 8.41p (FY28). On this basis, the forward yield (2028) is 4.6%. If these predictions prove correct, 5,000 shares bought today could generate an income of £1,202 over the next three years. That’s a pretty good return for doing very little.
But while these figures are impressive, BT faces many challenges. First, its credit is on the high side. And as it continues to spend heavily rolling out its 5G mobile networks and fiber-to-the-premises, the group may come under pressure to borrow more.
Worryingly, analysts are predicting a decline in revenue over the next three years. Also, earnings per share are forecast to fall to 17.6p in FY28. By comparison, it was 18.8p – 6.8% – higher in FY25.
Lack of traction
To be honest, it looks like BT is a bit stuck. If its earnings fall as expected that could lead to a decrease in its profits. Although, perhaps paradoxically, this is not what the forecasts are currently showing.
However, my opinion is not supported by its recent share price movements. The stock is now changing hands 27% higher than it was in January 2025. Maybe the analysts are right. They have a 12-month price target of 211p, which suggests the stock could rise 16% through 2026.
But I have my doubts. While I’m impressed by its immediate brand, strong management team, and attractive profitability, I think there are better opportunities – to test both revenue and capital growth – elsewhere.
